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Wall Street Set for Cautious Start
LONDON (Reuters) - Wall Street was set for a cautious start
on Friday amid volatility as futures and options contracts expire,
but the focus will remain on security after news Pakistani forces
were closing in on a key al Qaeda figure.
Pakistani troops resumed an offensive on Friday against a cornered
group of militants, possibly including Osama bin Laden (news - web
sites)'s second-in-command, after the expiry of a noon (2 a.m. EST)
deadline for them to surrender.
"There is an acute sense of unease in the markets regarding
geopolitical and terrorist risks. With key anniversaries looming
over the start of the Iraq (news - web sites) invasion, the markets
are going to stay in a state of heightened alert," said David
Brown, Chief European Economist at Bear Stearns.
"News that Bin Laden's key al Qaeda deputy has been cornered
by security forces in Pakistan will be seen as a positive development
over the future though," he added.
Last week's Madrid train bombings, which killed 202 people in Europe's
worst guerilla attack in more than 15 years and were linked to Islamist
militants, have revived worries there may be further attacks against
Western targets.
The Volatility Index (^VIX - news), one key measure of investor
anxiety in equity markets, has surged to five-month highs in the
past week. The index had been languishing at its lowest level since
1996 before the blasts in the Spanish capital.
Dealers also expect heightened volatility due to the expiration
of stock options, index options, index futures and single-stock
futures or "quadruple witching."
By 6:05 a.m. EST, U.S. stock index futures were pointing to a flat
to slightly weaker start to New York trading.
On Thursday, the Dow Jones industrial average (^DJI - news) ended
down 0.04 percent at 10,295.78, while the tech-studded Nasdaq Composite
(^IXIC - news) shed 0.72 percent to close at 1,962.44.
There is no major company lining up to report earnings, with an
investors day at health information data provider IMS Health (NYSE:RX
- news) a rare highlight in a paper-thin corporate agenda.
No major economic data are scheduled.
Chip makers may find support after a trade group report said North
American semiconductor capital equipment makers saw orders rise
six percent from January to February, reaching their highest levels
in three years.
The ratio of orders to shipments, known as the book-to-bill ratio,
was 1.14 in February, signifying that for every $100 of products
shipped, $114 in new orders were received.
But shares in chip maker Lattice Semiconductor (NasdaqNM:LSCC -
news) may come under pressure after it again delayed reporting its
fourth-quarter results as it worked on a review of its deferred-income
accounting.
Lattice shares fell to $8.00 on the INET electronic brokerage system
from a close at $8.90 in regular Nasdaq trade.
Also among techs, shares of design software maker Adobe Systems
(NasdaqNM:ADBE - news) rose to $38.72 from Thursday's close at $36.27
after the company posted record first-quarter earnings and revenue.
U.S. cigarette maker Philip Morris (NYSE:MO - news) may also be
boosted, after the Mississippi Supreme Court upheld the dismissal
of a lawsuit brought by Owens Corning (OTC BB:OWENQ.OB - news) against
cigarette makers, saying the suit showed no antitrust injuries.
Elsewhere, Nike (NYSE:NKE - news), the world's top maker of athletic
shoes, fell from near year highs after reporting a jump in quarterly
profit after the bell. Its shares slipped to $76.20 from a close
at $76.82 on the New York Stock Exchange (news - web sites).
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